Cable lifeline for Comcast

The US’s largest cable operator Comcast posted a 13% decline in profits for the first quarter of 2008. However, excluding one off gains from the dissolution of cable partnerships, Comcast said quarterly profits were USD588 million compared with USD537 million last year. Net income was USD732 million in the three months ended 31 March 2008, compared with USD837 million in the first quarter a year ago. Revenue was up 14% to USD8.39 billion. Operating income was up 23% to USD1.55 billion.

While Comcast is taking voice customers from rival telcos, they in turn are taking its higher-value video customers. Comcast added 639,000 digital telephony subscribers during the first quarter, up 9% on the same period in 2007, and gained 492,000 new broadband internet customers down 16% on last year’s additions. The company said it lost 57,000 basic video subscribers during the quarter, but added about 494,000 digital video customers. It has found it harder to attract new users in the difficult economic climate, adding 1.46 million lines of service in the quarter a 20% drop from a year ago. Revenue rose as people spent more on cable television, which helped offset lower spending on phone and internet services. Customers spent an average of USD63.46 per month for cable TV, up from USD59.97 in 2007’s first quarter. In total cable TV revenue rose by 5% to USD4.71 billion. For digital phone services, subscribers spent USD40.24 a month, down from USD42.44, but total quarterly revenue for this income stream more than doubled to USD573 million as overall customer numbers increased.

The company’s plans for the rest of the year include switching more analogue channels to digital with the bandwidth reclamation plan affecting 20% of its market the end of the year. Its high speed internet, ‘DOCSIS 3.0’, should also be available in a fifth of Comcast markets by the end of 2008. The company also suggested it may enter the mobile market itself rather than by acquisition, although no concrete information was forthcoming.